As soon as word spread that Saudi Arabia’s Aramco cut prices, rather than production, for its US customers – though it raised prices for Asian and European customers – the price of WTI swooned $2 a barrel on Monday, then continued to plunge on Tuesday, briefly dropping below $76 a barrel, before recovering a smidgen. Prices not seen since mid-2012.

The Saudi price cut came on top of lagging economic growth and iffy demand in China and possibly a triple-dip recession in Europe, layered with what increasingly smells like an oil glut in the US where production from shale has been skyrocketing. If this price environment gets worse – and that seems to be the trend for the moment – the heat will spread to the US fracking industry.

Shale oil drillers will bleed, and some of them will crumble under the pile of debt they have issued. Plenty of investors – including those with conservative-sounding bond funds that are larded with energy junk bonds, and those with equity funds that have picked up the slew of recent energy IPOs – will lose their shirts. And if it lasts long enough, some states where oil has become the new economic lifeblood will get hit too. But mostly, in the vast and diversified US economy, it will be a minor squiggle, counterbalanced in part by the benefits of lower energy prices for consumers and businesses.

For Russia, the plunge in oil prices has a broader meaning. Russia’s economy and government have both become dependent on the hard-currency revenues generated by oil and gas exports. And the ruble has been plunging in sync with the price of oil:

Russian energy companies are getting hit by a double-whammy. They borrowed in dollars and euros, and have to service that debt in those currencies. But now the sanctions strangle their ability to raise dollars and euros in foreign capital markets on which they’ve become dependent. Like their corporate brethren around the world, they have to borrow money to service or roll over the money they already borrowed. That must happen in dollars and euros. And now, the sanctions strangle their ability to service their mountain of debt.

Those sanctions hit just when the plunge in oil prices has started to cut into revenues from exports of oil and natural gas (whose price is linked to the price of oil). In conjunction with the sanctions, the drop in oil prices, if it continues, may well turn into a fiasco for Russia.

Despite Russia’s still high but dropping foreign exchange reserves and still strong balance sheet, its credit rating has come under pressure [Why Moody’s Cut Russia to Two Notches above Junk]. And here is the uncomfortably rising probability of default that CDS traders now assign to Russian 5-year debt – a dizzying 16.9%:

Oil producers have become fat from the high oil and gas prices of recent years. But those prices have come at the expense of consumers and businesses. Now, those folks are breathing a sigh of relief. The balance of power is shifting, if only briefly.

And so the plunge in the price of oil reverberates around the world. Companies, industries, governments, and entire countries have built their future on high and eternally rising prices. That prices could plunge this quickly, and to this level, and perhaps much lower, has not been built into their scenarios. And now they have to face the consequences.

But in Russia, the oil price problems have become entangled with the ruble that has been falling from record low to record low. There are many losers when a currency gets smashed.